12.20.13: Northern Gateway gets go-ahead

Sign up for the Executive Summary email briefing to get the news delivered straight to your inbox first thing in the morning.

In a decision that spans two volumes and nearly 500 pages, a federal panel said this week that Canada is better off with Enbridge Inc.’s Northern Gateway pipeline than without it, reports the Financial Post‘s Jeff Lewis. The three-member panel led by Sheila Legget said the $6.5 billion project’s economic benefits outweigh the environmental burdens. But the long awaited verdict includes 209 conditions. Enbridge must set aside $950 million in case of a large oil spill, develop a marine mammal protection plan and fund research on heavy oil cleanups, the panel said. Final say on the pipeline rests with the federal cabinet, which has 180 days to decide the project’s fate. Gateway, if built, would allow up to 525,000 barrels of oil sands-derived crude to reach new markets in Asia and on the U.S. West Coast. A twinned pipeline would import 193,000 bpd of bitumen-thinning condensate. The panel’s long-awaited verdict comes more than a decade after Enbridge began plotting a new route for Alberta crude across two mountain ranges and hundreds of rivers to the British Columbia coast.

The British Columbia Securities Commission has made explosive fraud allegations against short seller Jon Carnes, saying the B.C. man made false claims regarding Canadian miner Silvercorp Metals Inc., reports the Financial Post‘s Peter Koven. The allegations were welcomed by Vancouver-based Silvercorp, which has operated under a cloud of controversy since the day it was targeted by Mr. Carnes in 2011. “From the very beginning, we were saying Silvercorp’s the victim here,” senior vice president Lorne Waldman said. But Mr. Carnes rejected all the allegations, stating that everything he published has proven to be true. He said that Silvercorp subsequently revised its resources and grades lower, and noted that it was hit with two shareholder class action lawsuits. “I’m really just clueless why the BCSC has made these allegations against me. They’re completely false,” he said in an interview. According to the commission, Mr. Carnes sought out two experts to verify his claim that there were contradictions between Silvercorp’s North American and Chinese filings. But neither of them found any obvious problems. In fact, the second expert said that the discrepancies were due to different reporting standards and different legislated cut-off grades between the countries.

It’s not quite what it wanted but it’s certainly better than it was expecting. Sun News will potentially land itself a bigger audience after Canada’s broadcast regulator offered a preview of a television system based on individual choices in a decision Thursday that also highlighted its willingness to intervene in the marketplace to promote news programming. As the Financial Post‘s Christine Dobby reports, the Canadian Radio-television and Telecommunications Commission ruled television providers must make a handful of channels devoted to national news available to their subscribers and even offer them on a standalone or “a la carte” basis. In that regard, the ruling provides a glimpse of the broadcast model likely to result from the commission’s current review of the future of the television system and the Conservative government’s direction to “unbundle” channels. The government has given the CRTC until next April 30 to deliver a report on so-called pick-and-pay television services.

Investors in the developed world seem aok with the U.S. Federal Reserve’s decision to taper this week. Emerging markets? The jury is still out, writes the Financial Post’s David Pett. Two days of trading hardly says much about the longer-term implications of the Fed’s decision to reduce its bond-buying program, but equity markets are taking it well in stride so far — at least in the developed world. North American, Japanese and core eurozone markets have all registered positive returns since the Fed on Wednesday finally pulled the trigger on tapering and reinforced its commitment to keep interest rates low for a long time yet to come. But the reaction from investors in emerging markets has been far more mixed. Stock indexes over the past two days have risen in some countries such as Taiwan, Indonesia and Mexico, but fallen in others like China, India, Malaysia and Thailand. “For developed markets, the Fed’s ‘enhanced’ guidance coupled with the dovish taper was decidedly good news,” said Pierre Lapointe, head of global strategy and research at Montreal-based Pavilion Global Markets, in a note to clients. “The reaction in emerging markets, however, was less unambiguously positive.”

Maybe there is one temptation out there to get Canadians to stop buying homes. Cheaper rent, writes the Financial Post‘s Garry Marr. Anyone sitting on the sidelines considering whether to buy a home in Canada might want to take a look at a recent report from the International Monetary Fund. The group says that among countries in the Organization for Economic Cooperation and Development, Canada is now the most expensive place in the world to own relative to the cost of renting. “In many OECD countries, the ratio of house prices to rents — a typical measure of price valuation — remains above historical averages, leaving room for price corrections down the road,” said the IMF, basing its comments on second quarter statistics for 2013. The Canada Mortgage and Housing Corp. said this week rental rates across the country continue to rise but mostly at around the rate of inflation. The IMF says Canada is the most expensive place to buy in the world using its housing to rent comparison, 85% above the average.

Now here’s a tax bill a lot of folks wouldn’t mind dealing with. Facebook Inc. Chief Executive Officer Mark Zuckerberg is selling shares to help pay taxes, joining the company and board member Marc Andreessen in an offering worth about $3.9 billion. About 27 million shares will be offered by Facebook, with an additional 41.35 million shares by Zuckerberg and 1.6 million from Andreessen, the company said in a statement today. Shares of Menlo Park, California-based Facebook fell as much as 2.7 percent. The follow-on sale, the first that Facebook has filed for since its May 2012 IPO, could raise about $3.9 billion based on the company’s closing price yesterday. The move comes a day before Facebook joins the Standard & Poor’s 500 Index, an event that triggers demand from index funds and other institutions to own a company’s stock. S&P had announced that as of the close of trading on Dec. 20, it plans to include Facebook’s Class A common stock in the S&P 500 Index, the company said.

Thanks for reading. We update this roundup throughout the work day, so please check back again for the latest news. Sign up for our Executive Summary email briefing to get the news delivered straight to your inbox. You can also follow on Twitter and Facebook.